WSHPDR_2013_Final_Report-updated_version

with local entrepreneurs to extend their business from
milling to local electricity distribution and has upgraded
three systems, supporting local production of turbines.
GIZ is currently assisting local education institutes in
Chimoio, Manica province, to set up a local hydropower
11 12 13
training and knowledge centre.
Renewable energy policy
The reforms in the energy sector have created the
necessary enabling environment for private investments
in the sector. Particularly the 1997 Electricity Act
foresees the granting of concessions for private energy
production, distribution and sales.
The private sector can operate its own generating
system, provide electricity to surrounding communities
and sell its energy surplus to the state power utility
while buying energy from the utility when it is required.
Furthermore, the Energy Fund Fundo de Energia
(FUNAE), with its focus on rural electrification using
renewable energy technologies, will provide good
support for possible private investors, as some of the
resources needed for the rehabilitation and/or
construction of new hydropower schemes can be
mobilized locally. However, it is important that the
Government actively encourages private sector
investment in renewable energy projects in
Mozambique and creates clear incentives for investors,
manufacturers and developers to utilize renewable
energies when making investments in the country.
Renewable energy support should not be targeted
exclusively at off-grid initiatives and poverty alleviation,
and renewables should be encouraged in economically
active sectors, including tourism, telecommunications
and commercial enterprises, as well as among middleclass
households. 3
Legislation on small hydropower
On the regulatory side, hydropower installations are
required to have a water use concession which is
regulated under the Water Policy. In fact, the Water
Policy mentions the use of water resources for standalone
and dam-connected hydropower purposes and
states that small- and medium-scale hydropower
facilities should be encouraged for off-grid electricity in
remote areas, extension of the national electricity grid
production and transmission capacity, as well as
economic development in general. 9
Barriers to small hydropower development
The main barriers to the development of small hydro
projects in Mozambique include the lack of framework
to support independent power producers. Reducing the
uncertainty of the project revenue streams and
increasing the availability of project finance would help
to promote economically sustainable projects. The
following measures are suggested by the International
Renewable Energy Agency to improve project bankability:
- Electricidade de Mozambique could take a small
equity stake in small hydropower projects to
reinforce the credibility of its long-term power
purchase agreement;
- The Ministry could work with the donor group to
develop a partial risk-guarantee fund with financial
institutions in Mozambique to promote lending to
small hydro projects;
- A system of feed-in tariffs could be developed to
provide long-term power purchase agreements,
access to the grid and attractive return on
investment;
- Consultations could be held with stakeholders to
design a simpler process for environmental impact
assessment for small run-of-river hydro plants. 14
In overall perspective the local situation in Mozambique
seems quite favourable to the development of small
hydropower, although it has proven to be difficult to
attract private sector funding.
References
1. Central Intelligence Agency (2012). The World
Factbook. Available from
www.cia.gov/library/publications/the-world-factbook/.
2. Clean Energy Information Portal: Reegle (2011).
Country Energy Profile: Mozambique. 2011. Available
from www.reegle.info.
3. Chambal, Hélder (2010). Energy Security in
Mozambique, Series on Trade and Energy Security :
Policy Report 3. Manitoba. Available from
www.iisd.org/tkn/pdf/energy_security_mozambique.pd
f.
4. Hankins, Mark (2009). A Renewable Energy Plan for
Mozambique. Nairobi. Available from
www.internationalrivers.org/files/attachedfiles/clean_energy_for_mz_30_9_09.pdf.
5. Chambers, Helen (2010). Trade Knowledge Network,
Series on Trade and Energy Security - Policy Report 3,
Energy Security in Mozambique. Manitoba.
6. Electricidade de Mozambique (2010). Statistical
Summary 2010. Maputo.
7. Barnett, Andrew and Smail Khennas (2000) Best
practices for sustainable development of micro hydro
power in developing countries. Warwickshire. Available
from
www.microhydropower.net/download/bestpractsynthe.
pdf.
8. Practical Action (2005). Report on the scoping study
for micro hydro investments in Mozambique.
Warwickshire.
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